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Insiders have been buying these ASX shares this week

At the end of each week I like to look at which shares have experienced meaningful insider buying.

This is because insider buying is often regarded as a bullish indicator as few people know a company and its intrinsic value better than its own directors.

Three shares which have reported meaningful insider buying this week are listed below:

Aristocrat Leisure Limited (ASX: ALL)

A change of director’s interest notice reveals that non-executive director Neil Chatfield picked up 6,000 of the gaming technology company’s shares through an on-market trade for a total consideration of $144,120. This brought his holding to a total of 18,000 shares. It appears that Mr Chatfield feels the sell-off of Aristocrat Leisure’s shares has been overdone, leaving them in the bargain bin. I think this is the case and believe they offer a compelling risk/reward at this level.

Coles Group Ltd (ASX: COL)

This supermarket giant’s independent non-executive director, Zlatko Todorcevski, has dipped into the market for a second week in a row. According to a change of director’s interest notice, Mr Todorcevski followed up on last week’s on-market purchase of 8,000 shares at $12.50 per share with the purchase of 8,695 shares on-market at an average price of $11.50 per share. The director has certainly done well with the second purchase. Coles’ shares have been on a tear this week thanks largely to a positive broker note out of the Macquarie equities desk. At the time of writing they are trading at $12.50.

Rio Tinto Limited (ASX: RIO)

According to a change of director’s interest notice, non-executive director Michael L’Estrange AO has bought 500 of the mining giant’s shares through an on-market trade at an average of $73.46 per share or a total consideration of $36,730. This purchase took the director’s holding to a total of 3,103 shares. I like Rio Tinto at these prices and think it could be worth following his lead and buying shares.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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